Assessment of the effects of performance contracting on employee productivity in the public sector: a case study of New Kenya Cooperative Creameries Company Limited

Abstract:

Performance contracting is regarded as a powerful tool contributing to productivity in
work place. Recent research have shown that effective use of performance contract in
public organizations have had varied results. Many organizations face different
challenges while attempting to enhance employee productivity. This study attempted to
establish the effect of performance contracting on employee productivity in the public
sector in Kenya. It analyzed the influence of training, promotion, remuneration, discipline
and legislation. To achieve this objective, the study adopted a descriptive research design
which sought to establish factors associated with certain occurrences, outcomes,
conditions or types of behavior. A target population of 90 individuals from the
organization formed the basis for the study and stratified random sampling technique was
used to arrive at a sample size of 45 individuals. Questionnaires were used to collect Data
after which the collected data was edited, coded and entered for analysis. The data was
analyzed using descriptive statistics. Statistical Package for social science (SPSS) and
inferential analysis was used to analyze the data The findings were presented in pie
charts, bar graphs, and tables for clarity. The finding of the study indicated that training,
promotion, remuneration, discipline and legislation infltienced employees' productivity.
However, while the respondents rated training, promotion and discipline in the
organization as good, legislation was rated as fair. The study therefore recommended that
the organization should commit more resources to train their employees to achieve better
employee performance. It is also recommended that New KCC should embrace employee
promotion in terms of position elevation, increased pays and others to encouraged
employees to achieve their ambitions and thus enhanced productivity. Also, counseling
and other disciplinary action was recommended for employees who fail, so that they
remain focused to the organization's bottom-line.